17 September 2019
Governments in China are easing the barriers on non-local new-energy vehicle makers, but more needs to be done.
Governments in China are easing the barriers on non-local new-energy vehicle makers, but more needs to be done.

Local protectionism waning in green car industry: BYD

Local governments in China have begun to scale down their protectionism on new-energy carmakers, offering a better chance for non-local producers to compete better in various markets within the country, according to an executive with BYD Co.

Li Yunfei, deputy general manager of BYD’s sales unit, said protectionist barriers have fallen significantly when compared to previous years, although there is still room for improvement.

“The situation has greatly improved,” Li said.

One of the biggest problems faced by new-energy vehicle makers in China in recent years has been the roadblocks put up by local governments on non-local firms. Companies found that expanding their sales to markets outside their region was difficult as local governments sought to protect their own green car makers.

Although the central government has tried to promote electric cars for years, local authorities have often set high thresholds for producers registered outside their jurisdictions, making market entry hard for non-local firms. Preferential policies were put in place for local players, hindering the growth of the overall industry in China.

Speaking at an industry forum in Shenzhen last month, BYD’s Li said things have turned for the better recently. He didn’t elaborate on the matter, but his remarks indeed represent a significant change. Executives of the Shenzhen-based electric carmaker had in the past avoided talking about protectionist policies in public, as they didn’t want to get into the bad books of authorities elsewhere.

‘Turning point’ 

Top Chinese leaders including President Xi Jinping and Vice Premier Ma Kai have visited new energy car producers several times in the first half, reiterating support for the industry. Meanwhile the Ministry of Industry and Information Technology, among other top regulators, have stressed that authorities will tear down the barriers. In late May, mainland media reported that the ministry may unify the incentive policies in different regions.

Several senior business insiders said in industry forum last month that they believe 2014 can be a turning point for the industry.

“The time is ripe,” BYD’s Li told EJ Insight on the sidelines of the forum. He expects electric car sales in China to expand rapidly as personal consumption grows.

With more electric car makers entering the battlefield, consumers now have a lot more choices in electric cars, he said, also noting higher willingness among people to buy new-energy vehicles.

BYD’s plug-in hybrid electric car Qin has been mostly bought for personal use, he said. Qin’s sales this year are expected to be at least 12,000 units, given that the company sold about 4,000 units in the first four months this year and the fact that it won new orders for 8,000 units.

Fresh interest

As the third wave of electric vehicles, this time triggered by Tesla, sweeps through China, there is heightened interest among consumers.

A recent informal test conducted by a Beijing online media outlet showed that a large number of passersby recognized a Tesla vehicle as it was being driven for a spin around the Zhongguancun area.

At present, the supply of electric vehicle products falls short of demand, Ye Lei, deputy chief of Dongfeng Nissan Passenger Vehicle’s sales unit, said during the same industry forum in Shenzhen.

Meanwhile, Fu Gangzhan, director of the Center for Automotive Industry under Tongji University, criticized authorities for lacking proper understanding of the market and consumer demands when mapping out guidelines for the industry.

Phased results from trial programs of electric taxis and buses in Shenzhen have showed the charging station operator has encountered difficulties in covering infrastructural and operational costs. Thus, the operator is reluctant to build more charging stations, National Business Daily reported in late May.

Industry insiders say the city is considering withdrawing a promise made four years ago to give exemption on service fee charge for green taxis and buses. The industry, obviously, is not pleased.

– Contact the reporter at [email protected]


EJ Insight reporter